Lenders successful in judicial review of the Financial Ombudsman Service

On 24 June 2026, the High Court handed down its long-awaited judgment in The King (Barclays Bank UK Plc & Others) v Financial Ombudsman Service [2026] EWHC 1555 (Admin) providing welcome clarification to financial services providers on the extent of the Financial Ombudsman’s jurisdiction and time barring rules. Read our summary of the judgment below.

Background

The case concerned four claims for judicial review brought by Barclays Bank UK plc, National Westminster Bank plc, Vanquis Bank Limited, and Santander UK plc against the Financial Ombudsman Service Limited (FOS), arising from the FOS's interpretation of its jurisdiction over complaints that credit relationships were unfair under section 140A of the Consumer Credit Act 1974 (the CCA). In summary:

• The four individual complaints followed a common pattern: each customer alleged that their bank had extended unaffordable credit facilities (by credit card or overdraft), creating an unfair relationship.
• In previous complaints before the FOS, it had taken the approach that complaints about credit decisions which occurred more than six years before the complaints were made were out of time (applying the time bar rules under DISP 2.8.2 R).
• However, FOS later changed its approach saying it had considered the judgment in Smith v Royal Bank of Scotland plc [2023] UKSC 34 (Smith) and said that because the relevant agreements were subject to the unfair relationship provisions under s140A of the CCA, it could apply the approach to limitation from the courts – and so the FOS said if the relationships were ongoing, time for the purpose of DISP 2.8.2 R had not begun to run.
• FOS also said that because the complaints were not time barred, it had jurisdiction to investigate and provide redress for the events throughout the whole relationship (which for one of the complaints meant looking back to events from 1998).

The complaints were part of a large number of irresponsible lending complaints being referred to FOS and therefore this change in approach was highly material. The four lenders therefore each issued a claim for judicial review.

The claims were managed together and considering the significance to the banking industry, the Financial Conduct Authority (FCA) intervened. The intervention was novel – this is the only known case of the FCA intervening in a case to oppose the position taken by the FOS.

The key legal questions

First, complaint time limits. The jurisdictional limit in issue was: when a complaint is made about financial services received, which acts or omissions (the "events complained of") are in or out of time? The applicable rule – DISP 2.8.2 R – states that the FOS cannot consider a complaint if the complainant refers it more than six years after the "event complained of".

Second, jurisdiction scope under section 140A. The banks submitted that the complaints, subject to limited exceptions, were brought out of time and that the FOS could not assert jurisdiction over the entire credit relationship, which would involve both investigation and if appropriate, redress.

Third, the interpretation of Plevin and Smith. Following the Supreme Court's decision in Smith, and drawing also on Plevin v Paragon Personal Finance Limited [2014] UKSC 61 (Plevin), the FOS adopted a new position on the scope of its jurisdiction, deriving from those cases a concept it called "corrective responsibility". Corrective responsibility was said to be the responsibility on a creditor to correct unfairness that it had produced in the credit relationship, and the FOS contended that each failure to fulfil that responsibility amounted to a fresh "event complained of" for DISP 2.8.2 R purposes, with time running only from the end of the credit relationship.

Summary of outcome

The Hon. Mr Justice Dexter Dias gave his judgment quashing the relevant ombudsman's jurisdiction decision, finding the legal error so fundamental that quashing was the appropriate remedy. Some of the key findings were:

1. Corrective responsibility does not exist. Smith and Plevin did not support the FOS’s arguments. The Hon. Mr Justice Dexter Dias held that Plevin, properly understood, is classificatory: it explains how a credit relationship may be described as unfair through omission rather than overt action, and how responsibility for that unfairness may be attributed to a creditor that omits to take steps that are "reasonable to expect". The court held that this is fundamentally different from a prescriptive rule establishing a positive ongoing corrective responsibility on creditors to correct an unfair situation, with each failure to correct amounting to a fresh – even daily – "event" for DISP 2.8.2 R purposes.
2. Smith decided when a cause of action accrues for county court claims under section 140A – it said nothing about the FOS's distinct complaints jurisdiction or DISP 2.8.2 R. The assessment in the court is different than before the FOS. The regime under the Limitation Act 1980 to the unfair relationship provisions in s140A CCA is distinct from the time-bar provisions in DISP 2.8.2 R.
3. Acts within time do not unlock the entire relationship. The court held that the breadth of the ombudsman's redress discretion under section 229 of FSMA 2000 – which may extend beyond what a court could award – does not mean that events otherwise out of time are brought within jurisdiction. Awards must rationally connect to admissible, in-time acts and omissions.
4. The term “event” must be given its ordinary and natural meaning. The court held that the term "event" in DISP 2.8.2 R cannot bear the weight the FOS placed upon it. Its naturally understood meaning is a one-off occurrence (even if extended in time) and interpreting it to encompass a continuous series of daily failures to correct unfairness offends ordinary meaning and the rule's purpose of preventing stale complaints. The corrective responsibility construct and its associated fresh daily event interpretation would also undermine the clarity and predictability required by the time limit rules.
5. Following R (Mazarona Properties Ltd) v FOS [2017] EWHC 1135 (Admin), an additional reason for quashing FOS’s decisions was that the redress of the unfairness created by the provision of a financial service (credit facilities) is not itself a “financial service” at all.
6. The FCA had complied with its consumer protection objective. The FOS had argued at the oral hearing that the FCA, in opposing the FOS's interpretation, had failed to have regard to its consumer protection objective under section 1C of FSMA 2000. The court rejected that criticism, holding that by supporting a legally correct interpretation of the FOS's jurisdiction, the FCA was advancing its strategic objective of ensuring markets function well and acting in accordance with its statutory duty, not in dereliction of it.

What does this mean for lenders?

The judgment provides significant reassurance for lenders, credit card providers, and other consumer credit firms. The key takeaways are as follows:

• The proper approach to DISP 2.8.2 R is now confirmed to be straightforward: the FOS must identify whether there is an event within the six years preceding the complaint. If there is no qualifying in-time event, the complaint falls outside the FOS's jurisdiction.
• The ombudsman retains the right – subject to rationality review – to characterise what a complaint is truly about.
• Redress is anchored to in-time events. DISP 3.7.4 R ties the applicable money award cap to the date of the act or omission, reinforcing that redress must rationally connect back to admissible, in-time acts and omissions. Historical acts may inform the context of fairness assessment, but cannot separately attract redress.

*TLT LLP acted for Vanquis Bank

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